Federal prosecutors have filed charges against two men they say cheated investors in a billion-dollar pyramid scheme.

James Merrill, 53, of Ashland, and Carlos Wanzeler, 45, of Northborough are charged with one count of conspiracy to commit wire fraud.

Merrill was arrested Friday and is held until a bail hearing next week. An arrest warrant was issued for Wanzeler. Messages were left for their attorneys.

The complaint says they operated TelexFree, an Internet phone service that made most of its revenue from people buying into the company with a promise of getting paid for posting online ads for it. The scheme allegedly operated from January 2012 until March 2014.

TelexFree filed for bankrupty in April. Securities regulators have frozen its assets.

Massachusetts regulators say many victims were local Brazilian immigrants, but complaints also have come from other countries.